Should games increase profit sharing with teams?

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Published on: 06/07/2017

Various organisations are pushing various game creators to increase profit sharing, ranging from LoL, Dota 2 and CS:GO.

Increased profit sharing aims to prompt game developers / the companies to allocate more money to the competitive scene. Breaking the meaning down, it aims to raise the percentage that Riot / Valve contributes to tournament prize pools and the overall standard of venues relative to the revenue generated from the game, such as the sale of Riot points or skins from all the games.

While you may view the push for increase profit sharing amongst competitive gaming organisations and the games as a simple money grab for team owners, this is simply not the case. Organisations are under increase pressure from tournament authorities and are being forced to follow a minimum standard set out by most games.

This includes having to provide competitive tournament players with a high minimum salary and fairly comfortable living conditions. On top of that pressure, the increased competition has forced organisations to pour money into various services for the players to maximise efficiency and increase team bonding for any possible advantage. These activities are extremely costly, for example, Counter Logic Gaming’s League of Legends team not only live in a lavish house, they also have access to Cryotherapy, fully funded food allowances and cleaning services.

Riot has announced they will be committing to an increase profit sharing model for the coming year. They acknowledged that the competitive scene is fairly unsustainable, and that the competitive mid-tier teams are not profitable. While teams like TSM, C9, CLG, Fnatic and G2 are profitable, these names are only a small proportion of teams in the scheme of competitive League of Legends.

The teams mentioned are also the largest and best teams currently in the competitive scene, however, the current model fails to cater / allow rising teams to keep afloat. In addition, the teams that can survive and earn a profit usually rake in most of the money in the competitive scene, as they are able to buy up the best talent and consistently remain at the top.

Dota 2 teams have also been complaining to Valve to increase their profit sharing. This led to the recent change detailing Valve will aim to contribute to all approved minor and major tournaments prize pools. $150,000 for minors and $500,000 for majors, which is an amazing move that will help the organisations immensely. Not to mention, the insane $20,000,000++ prize pool for TI6 and TI7.

The current competitive scene is fairly poor, as teams mostly rely on sponsorships as their main source of income, instead of being sustained by skill from tournament winnings. This leads to increased power to sponsors and may lead to possible match fixing and sponsors are financially motivated and may contribute to more than one team. The move for increase profit sharing will relieve dependence on the sponsors and allow rising teams to successfully grow, leading to an improved competitive scene that will benefit everyone.